Question 1

Which of the following is an example of a renewable natural resource?

Accepted Answer

A)   fish
B)   soybeans
C)   wood
D)   All of the above are correct.E) B) and D)
F) B) and C)

Question 2

Malthus predicted that the power of population

Accepted Answer

A)   was greater than the power of the earth to produce subsistence. His forecast was on the mark.
B)   was greater than the power of the earth to produce subsistence. His forecast was off the mark.
C)   was less than the power of the earth to produce subsistence. His forecast was on the mark.
D)   was less than the power of the earth to produce subsistence. His forecast was off the mark.E) A) and B)
F) A) and C)

Question 3

Other things the same, if a country increased its saving rate, in 40 years or so it would likely have

Accepted Answer

A)   higher productivity, and a higher growth rate of real GDP.
B)   higher productivity, but not a higher growth rate of real GDP.
C)   the same productivity and growth of real GDP it began with.
D)   None of the above is correct.E) B) and C)
F) A) and B)

Question 4

Petroleum is an example of a nonrenewable resource.

Accepted Answer

A) True 
 B)False

Question 5

Use the data on U.S. real GDP below to compute real GDP per person for each year. Then use these numbers to compute the percentage increase in real GDP per person from 1987 to 2005.

Accepted Answer

Real GDP per person in 1987 was $6,435,0...

Question 6

All else equal, by saving more, a country

Accepted Answer

A)   has more resources for capital goods. The increase in capital raises productivity.
B)   has more resources for capital goods. The increase in capital reduces productivity.
C)   has fewer resources for capital goods. The decrease in capital raises productivity.
D)   has fewer resources for capital goods. The decrease in capital reduces productivity.E) A) and B)
F) A) and C)

Question 7

Suppose U.S.-based Intel Corporation builds and operates a new computer chip factory in Ghana. Future production from such an investment would

Accepted Answer

A)   increase Ghanaian GDP more than it would increase Ghanaian GNP.
B)   increase Ghanaian GNP more than it would increase Ghanaian GDP.
C)   not affect Ghanaian GNP, but would increase Ghanaian GDP.
D)   have no affect on either Ghanaian GDP or GNP.E) None of the above
F) C) and D)

Question 8

Figure 7-1. On the horizontal axis, K/L represents capital (K)  per worker (L) . On the vertical axis, Y/L represents output (Y)  per worker (L) .
 
-Refer to Figure 7-1. The shape of the curve is consistent with which of the following statements about the economy to which the curve applies?

Accepted Answer

A)   In the long run, a higher saving rate leads to a higher growth rate of productivity.
B)   In the long run, a higher saving rate leads to a higher growth rate of income.
C)   Returns to capital become increasingly smaller as the amount of capital per worker increases.
D)   All of the above are correct.E) A) and D)
F) A) and B)

Question 9

Country A and country B both increase their capital stock by one unit. Output in country A increases by 15 while output in country B increases by 12. Other things the same, diminishing returns implies that country A is

Accepted Answer

A)   richer than Country B. If Country A adds another unit of capital, output will increase by more than 15 units.
B)   richer than Country B. If Country A adds another unit of capital, output will increase by less than 15 units.
C)   poorer than Country B. If Country A adds another unit of capital, output will increase by more than 15 units.
D)   poorer than Country B. If Country A adds another unit of capital, output will increase by less than 15 units.E) C) and D)
F) None of the above

Question 10

For a given year, productivity in a particular country is most closely matched with that country's

Accepted Answer

A)   level of real GDP over that year.
B)   level of real GDP divided by hours worked over that year.
C)   growth rate of real GDP divided by hours worked over that year.
D)   growth rate of real GDP per person over that year.E) All of the above
F) B) and D)

Question 11

Which of the following statements is correct? In 2008,

Accepted Answer

A)   real income per person in the U.S. was about 8 times that in China.
B)   real income per person in China was about 2 times that in India in 2008.
C)   the typical resident of India had less real income than the typical resident of England in 1870.
D)   All of the above are correct.E) A) and B)
F) C) and D)

Question 12

If the best educated and most skilled persons leave a country, then in the short term this country's human capital per worker

Accepted Answer

A)   and physical capital per worker will increase.
B)   and physical capital per worker will decrease.
C)   will increase but physical capital per worker will decrease.
D)   will decrease but physical capital per worker will increase.E) A) and B)
F) A) and C)

Question 13

Other things the same, when an economy increases its saving rate

Accepted Answer

A)   consumption and production rise now.
B)   consumption rises now and production rises later
C)   consumption falls now and production rises later.
D)   consumption falls now and production falls later.E) All of the above
F) None of the above

Question 14

International data on the history of real GDP growth rates shows that over the last 110 years or so, rich countries got richer and poor countries got poorer.

Accepted Answer

A) True 
 B)False

Question 15

Over the period 1900-2008, which of the following countries experienced the highest average annual growth rate of real GDP per person?

Accepted Answer

A)   Indonesia
B)   India
C)   Pakistan
D)   BrazilE) None of the above
F) All of the above

Question 16

Which of the following is true?

Accepted Answer

A)   Kremer argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue. Malthus argued that increasing population would outstrip agricultural production.
B)   Kremer argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline. Malthus argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living.
C)   Malthus argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue. Kremer argued that increasing population would outstrip agricultural production.
D)   Malthus argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline. Kremer argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living.E) C) and D)
F) A) and C)

Question 17

If your firm's production function has constant returns to scale, and if you double all your inputs, then your firm's productivity will

Accepted Answer

A)   not change.
B)   increase but not double.
C)   double.
D)   more than double.E) All of the above
F) C) and D)

Question 18

Given that a country's real output has increased, in which of the following cases can we be sure that its productivity also has increased?

Accepted Answer

A)   The total number of hours worked rose.
B)   The total number of hours worked stayed the same.
C)   The total number of hours worked fell.
D)   Both b and c are correct.E) C) and D)
F) A) and D)

Question 19

Dilbert's Incorporated produced 5,000,000 units of accounting software in 2008. At the start of 2009 the pointy-haired boss reduced total annual hours of employment from 10,000 to 8,000 and production was 4,800,000. These numbers indicate that productivity

Accepted Answer

A)   fell by 4%.
B)   fell by 20%.
C)   rose by 12%.
D)   rose by 20%.E) C) and D)
F) A) and B)

Question 20

Industrial machinery is an example of

Accepted Answer

A)   a factor of production that in the past was an output from the production process.
B)   physical capital.
C)   something that influences productivity.
D)   All of the above are correct.E) B) and D)
F) All of the above

Exam 7: Production and Growth

For a given year, productivity in a particular country is most closely matched with that country's

Correct AnswerverifiedShow Answer

Industrial machinery is an example of

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Which of the following statements is correct? In 2008,

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Other things the same, when an economy increases its saving rate

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Figure 7-1. On the horizontal axis, K/L represents capital (K) per worker (L) . On the vertical axis, Y/L represents output (Y) per worker (L) . -Refer to Figure 7-1. The shape of the curve is consistent with which of the following statements about the economy to which the curve applies?

Correct AnswerverifiedShow Answer

Which of the following is true?

Correct AnswerverifiedShow Answer

If your firm's production function has constant returns to scale, and if you double all your inputs, then your firm's productivity will

Correct AnswerverifiedShow Answer

Suppose U.S.-based Intel Corporation builds and operates a new computer chip factory in Ghana. Future production from such an investment would

Correct AnswerverifiedShow Answer

Given that a country's real output has increased, in which of the following cases can we be sure that its productivity also has increased?

Correct AnswerverifiedShow Answer

International data on the history of real GDP growth rates shows that over the last 110 years or so, rich countries got richer and poor countries got poorer.

Correct AnswerverifiedShow Answer

Other things the same, if a country increased its saving rate, in 40 years or so it would likely have

Correct AnswerverifiedShow Answer

Malthus predicted that the power of population

Correct AnswerverifiedShow Answer

Which of the following is an example of a renewable natural resource?

Correct AnswerverifiedShow Answer

Use the data on U.S. real GDP below to compute real GDP per person for each year. Then use these numbers to compute the percentage increase in real GDP per person from 1987 to 2005.

Correct AnswerverifiedReal GDP per person in 1987 was $6,435,0...View AnswerShow Answer

All else equal, by saving more, a country

Correct AnswerverifiedShow Answer

Dilbert's Incorporated produced 5,000,000 units of accounting software in 2008. At the start of 2009 the pointy-haired boss reduced total annual hours of employment from 10,000 to 8,000 and production was 4,800,000. These numbers indicate that productivity

Correct AnswerverifiedShow Answer

Petroleum is an example of a nonrenewable resource.

Correct AnswerverifiedShow Answer

Country A and country B both increase their capital stock by one unit. Output in country A increases by 15 while output in country B increases by 12. Other things the same, diminishing returns implies that country A is

Correct AnswerverifiedShow Answer

If the best educated and most skilled persons leave a country, then in the short term this country's human capital per worker

Correct AnswerverifiedShow Answer

Over the period 1900-2008, which of the following countries experienced the highest average annual growth rate of real GDP per person?

Correct AnswerverifiedShow Answer

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Real GDP per person in 1987 was $6,435,0...
View Answer

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